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-------- Original Message --------
| Subject: | Japan vs. the US -- Re: Depression Economics... |
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| Date: | Fri, 26 Oct 2012 07:45:53 -0700 |
| From: | Jas Jain <jas_jain |
Japan vs. the US -- Re: Depression Economics
Subject: Re: Depression Economics: "US government will run deficits exceeding one trillion dollars a year…"
To: jas_jain
AS: "Jas, Real per-capita gdp growth has indeed been dismal over the past decade or so, but we did avoid a complete meltdown due to Gov't spending. If the Gov't reigns in deficit spending (a possibility) we will immediately fall into a deflationary depression."
Yes. Only being able to borrow-and-spend has kept inflation rate bet. Bernanke target of 1-2% (Core CPI over a 3-year period has been extremely stable over the past two years of weak recovery) by permitting artificially high, govt financed, consumption. Food Stamps do help keep the food inflation rate higher than it would otherwise be.
"That's not my baseline forecast though. I still see a Japanese style malaise resulting from continued high levels of Gov't deficit spending. Unlike most, I don't believe the bs that Gov't deficits are unsustainable or that the U.S. Government will run out of "money". That's not to say that continued deficit spending will aid the majority though.
There are very important differences between Japan and the US. First, and most important, is that the global economy was doing very well during most of the past 22 years helping Japan with exports despite very weak domestic demand. Going forward, the US economy is not going to be so lucky in terms of global growth. Second, Japanese have been producing more than they have been consuming all these years building a huge cushion of household savings. Third, in Paternalistic Japan the people at the top care a lot more about the people at the bottom than is the case in multicultural societies like the US. Income and wealth inequality is lot lower in Japan.
"The looting apparatus is still in place! The crooks are still in charge! There was never a moment of national learning about the fraudulent nature of the system and those pulling the strings. The fleecing will continue."
Crooks in Japan take in lot lower % of GDP than do Crooks in India and the US. In other words Japan has lot more makers than takers compared to the US. It is true that we are not Japan; we have a far worse political system that serves the Crooks at the expense of the working middle class. Americans have all the reason to be angry except that their vote means nothing in terms of correcting the problems.
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